Brief China watch.

At a recent meeting of central bankers at the Bank for International Settlements, Chairman Alan Greenspan was asked whether he trusted the economic data coming out of China. Greenspan, an admirer of the Chinese economic and financial leadership, nevertheless is said to have admitted that it was strange for a country to reach the end of a fiscal quarter and announce the GDP growth rate the following morning--and then never revise the number! Yet that's the experience with Chinese data. All of which probably means that the industrialized world may not know if the Chinese financial bubble has burst until after it happens.

Contributing to this sense of uncertainty is the legislation recently introduced in the U.S. Congress by Senator Charles Schumer (D-NY). Schumer has told colleagues he was stunned after introducing his legislation which threatens a stiff 27.5 percent tariff unless the Chinese revalue the yuan significantly upwards against the dollar. To his surprise, the highly influential legislator discovered no less than 67 colleagues in support of the proposal. Not long after such support became evident, the Bush Administration's jawboning on the currency issue turned aggressive.

Meanwhile, the mood in Tokyo toward Beijing grows angrier by the day. One former Ministry of Finance official, scoffing at studies purporting to show the Chinese economy dominating the world within twenty years, carries with him an article from Foreign Affairs magazine written in the early 1960s about the Soviet Union. The conclusion: by the late 1970s the then-robust Soviet economy was expected to have become the largest in the world.